Budget Resolutions and Economic Situation

Lord Evans of Rainow Excerpts

Tuesday 22nd March 2016 Commons Chamber

[Mr Osborne]

I will give way in a moment, but let me make this point. The central fiscal judgment of the Budget, and of this Government, is clear: borrowing has been cut from £155 billion when we came to office to £55 billion next year, and there have been falls every year; and higher spending on people with disabilities will be reflected in the autumn statement forecast, and we do not propose to make any further changes ahead of that. We can afford to absorb such changes when we are getting public spending under control, and we can make those changes and still achieve a sensible surplus of 0.5% of GDP by 2019-20. In short, we will go on delivering the economic security that this country elected us to provide.

[Graham Evans (Weaver Vale) (Con)]

Talking of Labour fiascos, may I remind the House of Gordon Brown’s 10p tax fiasco? We have taken 3 million of the lowest paid workers out of tax altogether.

[Mr Osborne]

My hon. Friend is absolutely right—what a contrast! This Government turned the 10p tax into 0p as we raised the personal allowance and took the poorest out of tax altogether.

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[Graham Evans (Weaver Vale) (Con)]

Thank you, Madam Deputy Speaker, for calling me to speak in this very important debate. It is a pleasure to follow the hon. Member for Dewsbury (Paula Sherriff), to whom I pay tribute. Given the mark that she has made on this place—I am pretty sure that I speak for the whole House in this regard—she will be more than just an answer in a future pub quiz. It is also a pleasure to follow my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke). He is certainly still a big beast. He was a big beast in the Treasury and he is now turning out to be a bit of a national treasure on the Government Benches.

This Budget puts the next generation first—I have to declare an interest here, as I have three young children—and it continues our long-term plan to reduce the deficit and achieve a surplus, and sets out the long-term solutions to long-term problems to ensure that Britain is in a strong economic position for the future.

Thanks to the work of my constituency neighbour, my right hon. Friend the Chancellor, Britain is set to be the fastest-growing economy in the G7, with the Office for Budget Responsibility predicting growth rates in excess of 2% for the remainder of this Parliament. [Interruption.] We are still the envy of the European Union, and we are stronger together. The challenges that the country faces are growing: global stock markets have had the worst start to the year for 45 years, prospects for emerging markets have worsened, and the sharp fall in the price of oil and commodities has contributed to lower global growth.

Eight years ago, the UK was one of the worst prepared countries to face the financial crisis. Today, it is one of the best prepared. We have fixed the roof while the sun was shining. Against that backdrop of global uncertainty, this Budget delivers security for hard-working taxpayers. Small businesses are the engine room of our country. They account for 99% of all private sector businesses, employing 15 million people—60% of all private sector employment. The combined annual turnover of SMEs was £1.8 trillion last year, nearly half of all private sector turnover in the United Kingdom.

Along with many small businesses across Weaver Vale, I welcomed the announcement in last week’s statement that business rate relief would be doubled permanently. Businesses with a rateable value of £12,000 and below will receive 100% relief. Some 600,000 small businesses across the country will now pay no business rates whatsoever.

[Simon Danczuk (Rochdale) (Ind)]

On that point, I also welcome the fact that, from 2017, 600,000 small businesses will be taken out of business rates, but it does not happen for a year. Retail business rate relief, which is worth £1,500, has also been abolished, but small shop owners will still have to pay that £1,500 for the next 12 months. Is that not disappointing?

[Graham Evans]

I bow to the greater knowledge of the hon. Gentleman, who does a great job as a small business owner in Rochdale. We cannot do everything at the same time, but overall I welcome this Budget. I am sure that he, too, welcomes the overall message to small businesses as they receive help with those reliefs.

Businesses with a property rateable value between £12,000 and £15,000 will receive tapered relief. Two thousand properties in Halton Borough Council and 7,000 properties in Cheshire West and Chester have a rateable value of below £15,000 and will all benefit substantially from the changes.

Building a northern powerhouse and rebalancing the national economy is a core part of this Government’s economic strategy. In 2015, over half a million more businesses were established outside London and the south-east than in 2010. A third of new businesses are in the northern powerhouse, and the overwhelming evidence is that those new businesses are creating more and more jobs.

In my constituency of Weaver Vale, unemployment is down by 57% since 2010. Almost three quarters of the growth in employment has been in full-time jobs, and real wages are rising strongly. Since 2010, there have been around 4,000 new housing starts in Cheshire West and Chester, and just under 2,000 new starts in the Halton and Runcorn area.

Nationally, housing starts are at their highest levels since 2008, and are up by 91% when compared with the low point in 2009. Local authorities will be able to access the £1.2 billion starter home land fund to help prepare more brownfield sites for starter homes, such as the legacy brownfield sites from ICI in Northwich in my constituency. This Government are helping generations of younger people in their 20s and 30s to buy their first home. Crucially, they are protecting our green belt while at the same time helping more young people to get on the property ladder.

The UK was the fastest growing major advanced economy in 2014, the second fastest in 2015 and it is forecast by the OECD to be the fastest growing in 2016. Under Labour, £1 in every £4 spent by the Government was borrowed, which was absolutely outrageous. Now it is £1 in every £14. The deficit has been cut by two thirds, and we will run a surplus by the end of this Parliament.

This Budget moves Britain from a high-tax, high-welfare, low-wage economy to a high-wage, low-tax, low-welfare economy. Next year, the long-awaited Mersey gateway bridge will be opened by a Conservative Government—and a Conservative Chancellor has made that happen. That reminds the world, if it ever needed reminding, that Great Britain and the north of England are open for business.

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[Graham Evans]

My hon. Friend is making a powerful point. During 13 years of Labour, many gaps were created, but particularly the north-south divide. Does he therefore welcome the Chancellor’s announcement of the High Speed 3 line from Manchester to Leeds, which will significantly cut train times—by 30 minutes?

[Mr Jackson]

I do. My hon. Friend is absolutely right. The fact of the matter is that this Government are taking the difficult decisions on infrastructure—on things such as nuclear power and airport capacity.